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Competitive Strategy... in fragmented industries Dr. Jean-J acques Lagref, 2012
What is Competitive Strategy? <ul><li>Competitive strategy involves  positioning  a business to  maximise  its value and s...
What drives Competitive Strategy needs? <ul><li>Changes :  </li></ul><ul><ul><li>Political, Economical, Technological, Env...
The most recurrent Failure <ul><li>&quot;Despite the clear need for sophisticated competitor analysis in strategy formulat...
What is the common status in industry? <ul><li>Many companies do not collect systematic information on competitors and thu...
The absolute Value: Anticipating from Monitoring <ul><li>Forecasting or anticipating capabilities emerge from the combinat...
Building a Competitive Advantage: How? <ul><li>Monitoring, anticipating competitors movements and strategies are not easy ...
CS: creator of value in Fragmented Industries. <ul><li>What is a fragmented industry? </li></ul><ul><ul><li>The term « fra...
Why so many industries are fragmented ? <ul><li>Many reasons like:  </li></ul><ul><li>+ low entry barriers </li></ul><ul><...
Strategic Solutions 1 based on Competitive Intelligence <ul><li>A -  Overcoming   the weaknesses  of the fragmentation:  <...
Strategic Solutions 2 based on Competitive Intelligence <ul><li>B -  Transforming   the weakness  of fragmentation into St...
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Competitive Strategy In Fragmented Industries

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Describes strategies to grow a fragmented business. Competitive Intelligence is at the heart of the strategy.

Competitive Strategy In Fragmented Industries

  1. 1. Competitive Strategy... in fragmented industries Dr. Jean-J acques Lagref, 2012
  2. 2. What is Competitive Strategy? <ul><li>Competitive strategy involves positioning a business to maximise its value and strength. </li></ul>
  3. 3. What drives Competitive Strategy needs? <ul><li>Changes : </li></ul><ul><ul><li>Political, Economical, Technological, Environmental, Legal… </li></ul></ul><ul><ul><li>Today more than ever, rapid environment changes might occur. </li></ul></ul><ul><li>Observing those changes is necessary but not sufficient </li></ul><ul><li>anymore. </li></ul>
  4. 4. The most recurrent Failure <ul><li>&quot;Despite the clear need for sophisticated competitor analysis in strategy formulation, such competitive analysis is sometimes not done explicitly or comprehensively in practice. Dangerous assumptions like </li></ul><ul><ul><li>&quot;competitors cannot be systematically analyzed&quot; or </li></ul></ul><ul><ul><li>&quot;we know all about our competitors because we compete with them every day&quot; </li></ul></ul><ul><li>These are wrong &quot; </li></ul><ul><li>Ref: Michael E. Porter in &quot;Competitive Strategy&quot; book. </li></ul>
  5. 5. What is the common status in industry? <ul><li>Many companies do not collect systematic information on competitors and thus act on the basis of informal impressions and intuition gained through isolated, fragmented pieces of information. </li></ul><ul><li>The objective of a competitor analysis is to anticipate and understand each strategy change a competitor might take, each competitor other firms could initiate to face a strategic move. </li></ul><ul><li>The purposes are to answer the questions </li></ul><ul><ul><li>“ what is the meaning of that competitor's strategic move and how seriously should we take it?” or </li></ul></ul><ul><ul><li>“ Who should we pick a fight with in the industry and with what sequence of moves?” » </li></ul></ul><ul><li>Ref: Michael E. Porter in &quot;Competitive Strategy&quot; book. </li></ul>
  6. 6. The absolute Value: Anticipating from Monitoring <ul><li>Forecasting or anticipating capabilities emerge from the combination of the </li></ul><ul><ul><li>monitoring activity and the expertise gained (technology, market...). </li></ul></ul><ul><li>In addition to studying of existing competitors, the exercise may be extended: </li></ul><ul><ul><li>to forecasting emerging or potential competitors </li></ul></ul><ul><ul><li>to forecasting valuable Mergers&Acquisitions </li></ul></ul><ul><ul><li>to detect firms candidates </li></ul></ul><ul><ul><li>for alliances </li></ul></ul>
  7. 7. Building a Competitive Advantage: How? <ul><li>Monitoring, anticipating competitors movements and strategies are not easy tasks. But, they are not easy for every organisations world-wide. </li></ul><ul><li>In fact, it is in this complexity that lies the advantage. Mastering CI processes is a necessity and it requires best in class methods. </li></ul><ul><li>In depth competitor analysis requires a great deal of reliable data and demand a subsequent hard work. </li></ul>
  8. 8. CS: creator of value in Fragmented Industries. <ul><li>What is a fragmented industry? </li></ul><ul><ul><li>The term « fragmented industries » is meant for many firms competing in an industry in which no firm has a significant market share and is able to strongly influence the industry outcome. </li></ul></ul>
  9. 9. Why so many industries are fragmented ? <ul><li>Many reasons like: </li></ul><ul><li>+ low entry barriers </li></ul><ul><li>+ low level of product innovation </li></ul><ul><li>+ strong competition + absence of economy of scale + various market needs + high product customisation </li></ul><ul><li>+ government prohibition of concentration </li></ul><ul><li>Consequences: </li></ul><ul><li>- low margins, business at risk </li></ul><ul><li>- no advantages of size in dealing wt buyers or suppliers </li></ul><ul><li>- expensive logistics </li></ul>
  10. 10. Strategic Solutions 1 based on Competitive Intelligence <ul><li>A - Overcoming the weaknesses of the fragmentation: </li></ul><ul><ul><li>Industry consolidation to create economies of scale. </li></ul></ul><ul><ul><li>Focus on manufacturing saving costs. Innovation focuses on the production processes. </li></ul></ul><ul><ul><li>Make acquisitions for reaching a critical size, provided a correct integration and management. </li></ul></ul><ul><ul><li>Early recognition of industry trends will provide early consolidation opportunities. </li></ul></ul><ul><ul><li>Grow earlier and faster than competitors would do to dominate the market. </li></ul></ul><ul><li>Critical Competitive Intelligence information </li></ul><ul><li>are needed at each level. </li></ul>
  11. 11. Strategic Solutions 2 based on Competitive Intelligence <ul><li>B - Transforming the weakness of fragmentation into Strength </li></ul><ul><ul><li>Ex1: computer manufacturers have moved to computer service providers ( IBM ) </li></ul></ul><ul><ul><li>Ex2: 3D-Printing manufacturers are moving to service providers (3D Systems) </li></ul></ul><ul><li>Many fragmented industries produce products or services that are commodities and thus difficult to differentiate. </li></ul><ul><li>A smart driven Innovation Program is a unique solution to grow a differentiated business in a sustainable manner. In addition, the specialisation of the products will allow the firm to gain bargaining power with suppliers. </li></ul><ul><li>Competitive Intelligence is central to seize </li></ul><ul><li>opportunities and innovate successfully. </li></ul>

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